Kentucky’s Rising Student Debt Crisis

The United States, the so-called “Land of Opportunity,” has a knack for leaving people behind. Take an example aside from the titular issue: the healthcare system. Virtually every other developed country in the world has one form or another of a single-payer healthcare system. The United States does not.

Government inaction exists most strikingly within American higher education. Tuition at public and private institutions has skyrocketed over the past 40 years, even with inflation fully factored in. To curb this, the federal government has become the primary financier of student loans. In total, student loan debt amounts to $1.3 trillion, and continues its steady rise at this very minute. 

Loans are not the solution, and the federal government is not guaranteeing anything to anyone by issuing loans. When a person signs off on their loans, they’re likely not told about the years of laborious work that will be put in to pay them off.

A trend that certainly doesn’t help is the methodical corporatization of the higher education system as a whole—an attack that seeks to corrupt and soil education’s very role as a cultivating institution. The effects are right before our eyes. Universities function, effectively, as corporations with a bottom line, seeking profit-making opportunities and cost reductions.

How is Kentucky Faring?

Let’s look at Kentucky. The picture is no less grim. Data released by the Kentucky Center for Economic Policy reveals, ominously, the degree to which Kentucky is an indebted state. As wages and Federal Pell Grants fail to keep pace with the rising costs of college attendance, a rising share of Kentuckians are taking out student loans—an estimated 616,000 adults currently, or 18%, which is higher than the national rate of 12.9%. In the Commonwealth alone, principal and interest balance total almost $20.5 billion.

The median amount of loans owed is around $18,000. However, a shocking number of Kentucky residents—an estimated 125,000—owe more than $50,000. Upon closer inspection, borrower demographics tell us something as well: the fact that young college graduates are not the only age group with a heavy loan burden. Close to 20,000 borrowers—with an average of $38,000 of student debt—are at or near retirement age. This is attributable to a large share of parents who’ve taken out loans to finance their children’s education.

Of course, institutional factors play a large role in the mess. Hikes in tuition echo slashes in funding of public universities by state governments. As higher education becomes increasingly underfunded by individual states, the costs of attending college rise steeply—and of course, the student has to cough it up.

What’s the Plan?

At the end of the day, the key player in determining who can and cannot get a free, high-quality education is the federal government. As mentioned before, 92% of outstanding student debt in the United States was issued by the federal government—so they regulate the mass of it. Debt cancelation should be the common-sense position. Virtually every other developed country provides free education … and we certainly don’t want to be behind, do we?

Here’s how we put an end to this: current loans should be canceled by executive order. President Biden has already canceled $11.5 billion, so there’s your precedent. Additional fees, room and board, and other non-tuition costs should be covered by Pell Grants. After that, public colleges and universities should become tuition-free through legislation similar to the College for All Act proposed by Rep. Pramila Jayapal (D-Washington) and Sen. Bernie Sanders (I-Vermont). College for All guarantees free tuition for families that make up to $125,000, but it should go further. No family should be singled out. The only way to truly guarantee education to Americans is to finance it universally.

Want to talk economics? The cancelation of student debt creates financial security, allowing workers to make basic ends meet. It increases the likelihood of consumer investment, strengthens consumer protections, and provides people with more opportunities to buy. From this point of view, the ways in which student debt cancelation would change lives are innumerable.

Let’s think about this from an elementary moral position, though. The state of American education is unconscionable. Human beings are being refused the opportunity to flourish because there is an indefensible price tag on learning. If you can’t afford it, you can’t learn. If you can, well, guess what? Welcome aboard. You’ll learn to live with your debt until you pay it off — interest included, of course.

Look: education is the nourishment that leads a human being to their fullest potential, and there is an obstacle in the way of that pursuit. Americans know! Calls for federal relief programs are heard all across the United States—and exist as majorities within both parties.

Of course, pushback and resistance from private financiers is expected. It’s only natural that the business class will wage a relentless war to curb regulation of its wealth. This bitter struggle isn’t fought outright– instead, the wealthy opt for more subtle methods. All they have to do is tweak the narrative. Student debt cancelation is smeared as too far, too radical, and too extreme. 

Profiteers don’t want that. Limiting the spectrum of debate to acceptable barriers is their strategy. 

Their Achilles’ heel is that they don’t have the people.

Published by Zane Phelps

Zane Phelps is an undergraduate in the University of Louisville Department of Political Science. Zane is a staff researcher for The Cardinal Edge, an undergraduate-ran research journal. His primary research interest is political theory.

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